Well, there certainly is not time like the present to make such plans.
And, there is no better time to take up this as one of your first New Year's Resolutions to resolve.
So, where do you start?
Today, we turn to a recent Money titled "5 Essential Documents for Protecting a Loved One with Dementia."
According to the article, if you have dementia, then you need someone (usually a relative or trusted friend) who can "legally" step in and make important financial and medical decisions on your behalf.
You must legally appoint this "someone" through proper legal documents while you are yet mentally able to make sound decisions and have the legal capacity to be involved in making the choice.
If you delay with the paperwork, your dementia may progress to the point where you cannot legally turn over power.
When you reach that point of no return, your only option is for "someone" to petition for guardianship and ask a judge to declare you incapacitated.
That can take about two months and is expensive.
I call it the "lawyer full-employment program," since it employs the lawyer hired to petition for guardianship, the judge who will decide whether you are incapacitated, and the lawyer appointed by the judge to protect your rights in the guardianship.
That is three lawyers, but there could be more.
How?
It can get even worse if another family member contests the application for guardianship.
Did I mention that the whole process is "public" in nature?
Yep, anyone and everyone has open access to the petition filed, the inventory of what you own (and owe) and the details of your mental and physical condition triggering the petition.
Yikes.
Yikes is right.
Laws vary by state, and mistakes can be costly.
You should draft the following legal documents only with the help of an experienced estate planning attorney.
Here is the short list of key documents recommended in the original article:
Durable Power of Attorney.
This gives authority the "someone" you appoint to make financial decisions for you. This includes blocking and tackling basics like like writing checks to pay bills, handle tax returns, and even sell your home.
A "durable" power remains in place if you become incapacitated and cannot make decisions for yourself. A non-durable power of attorney terminates if you become incapacitated.
While you are at it, avoid some potential headaches and visit the institutions with which your "someone" likely will have interaction. Think your financial advisor. The broker-dealer or wire house may have proprietary forms to execute in addition.
If you spend a significant amount of time in another state, you should also have a power of attorney drafted according to that state's laws just to cover the bases.
Advance Health Care Directive.
In our firm we use a health care treatment directive with a durable power of attorney for health care decisions allowing you to make choices about treatments, doctors, and other health-related matters ... and appoint your "someone" to make those decisions for you.
Living Trust.
You might also consider creating a living trust, especially if you have substantial assets or varieties of assets (e.g., real estate in multiple states).
A living trust makes it easier for another to manage the assets. The trustee must adhere to your specific instructions. It is also useful in states with onerous probate procedures because a living trust may allow the estate to avoid probate when distributing the property. Again, talk to a knowledgeable estate planning attorney before setting up any kind of a trust.
So, how do you find an "experienced" estate planning attorney?
First, ask around. Friends, family and other professional advisors are trustworthy sources.
Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").
Third, either way, verify. Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.
How?
There are two helpful resources just a mouse click away to assist with your due diligence: Avvo.com and Lawyers.com.
Check any Avvo ratings, client ratings/testimonials and attorney endorsements on Avvo.com and any "peer ratings" by judges/other attorneys and any client ratings/testimonials on Lawyers.com.
In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
Reference: Money (December 11, 2015) "5 Essential Documents for Protecting a Loved One with Dementia"
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